This past week the AirAsia group paid off just under US$10 million in overdue passenger charges to Malaysia Airports Holdings Berhad (MAHB). MAHB is the operator of Kuala Lumpur International Airport - a main hub of AirAsia. The payment comes after an official ruling by Kuala Lumpur High Court in July that ruled in favor of MAHB.
Forced payment through the banks
According to CH-Aviation, three civil suits were filed against AirAsia and AirAsia X in order to recover the passenger charges. These fees have been long disputed by the AirAsia group. In fact, AirAsia launched a petition against the passenger service charges at Malaysia’s airports, calling them unfair.
The budget carrier says charges have increased more than 200% in three years. It argues that passengers using low-cost hubs (like Kuala Lumpur International Airport's low-cost terminal, KLIA2) should pay less than those using full-service airports.
According to CH-Aviation, AirAsia Group CEO Tony Fernandes and co-founder Datuk Kamarudin Meranun spoke out against the ruling:
"AirAsia strongly believes that the court has erred and we will appeal this decision."
With the backing of the high court, Malaysia Airports had served "garnishee orders" on September 6th. These are are orders meant to recover money and forced three banks that work with AirAsia and AirAsia X to put aside the funds for payment.
AirAsia started a petition and gathered over 50,000 signatures since the petitions' launch. Clearly this was not enough to sway the court.
Problems at KLIA2
It was last year, in July 2018 when MAHB raised the tax on passengers departing via Kuala Lumpur’s budget terminal, KLIA2. Prior to this, departing passengers had been charged a lower rate than at the main Kuala Lumpur airport - KLIA. This price increase was enacted to equalize the charges at both airports.
As KLIA2 is built with the intention of being a low-cost carrier facility, there are fewer amenities with a far more basic experience when compared to the main KLIA airport. AirAsia was not happy with this and claimed that the hike was unfair as it didn’t represent the level of service available to passengers at KLIA2.
Conclusion
Having traveled through both terminals, it does seem somewhat unfair to have passenger fees imposed for a lower quality airport experience. The main KLIA airport includes an aerotrain that shuttles passengers between its various terminals. Furthermore, it has a 'jungle boardwalk' - a rainforest garden within the airport terminal.
KLIA2, on the other hand, is far more basic in terms of decor and amenities. I can understand why the AirAsia Group's case and how they would be angry having to pay the same level of passenger charges.
We would love to know what you think. Do you think the charges are fair? Should passengers at low-cost hubs pay less service tax than those at full-service airports? Let us know by leaving a comment.
We reached out to AirAsia for comment. They responded eventually pointing us to a press release. Part of it says:
"As an update, we wish to announce that AAB had on 18 September 2019 paid a sum of RM14,156,818.47 (being the amounts specified in the Garnishee Show Cause Orders dated 23 August 2019) to MASSB to defray the garnishee execution proceedings. The payment was made by AAB without prejudice to AAB’s rights, including AAB’s rights in the appeals made in relation to the judgement order dated 18 July 2019, as well as any connected interlocutory applications."